New Zealand Law Society - Treasury Secretary's response "clumsy", says Commissioner

Treasury Secretary's response "clumsy", says Commissioner

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Treasury Secretary Gabriel Makhlouf should have sought more advice before issuing a media statement about the causes of access to Budget-sensitive material on the Treasury website, State Services Commissioner Peter Hughes says.

Mr Hughes has released the findings of an investigation into questions raised concerning Mr Makhlouf, and his actions and public statements about the causes.

The investigation found Mr Makhlouf’s decision to refer the matter to the Police was in good faith, reasonable and was not politically influenced. However, Mr Hughes is critical of the media statement.

“In my view it was not managed well by Mr Makhlouf. It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive," he says.

“I have concluded that Mr Makhlouf failed to take personal responsibility for the Treasury security failure and his subsequent handling of the situation fell well short of my expectations.  Mr Makhlouf is accountable for that and I’m calling it out.”

Mr Hughes says the investigation report is very clear that there are no grounds to support allegations that Mr Makhlouf's public statements or actions were politically biased.

The investigation was carried out by Deputy State Services Commissioner John Ombler. He found:

  • Mr Makhlouf acted in good faith, reasonably and without political bias in relation to the advice he gave the Minister of Finance.
  • Mr Makhlouf’s decision to refer the matter to Police was made in good faith, was reasonable and showed no evidence of political influence.
  • Mr Makhlouf did not act reasonably in relation to:
    • his use of the phrase “deliberate and systematically hacked” in his media statement issued at 8:02pm on Tuesday 28 May;
    • his use of the bolt analogy in media interviews on the morning of Wednesday, 29 May;
    • in his media statement on the morning of Thursday, 30 May, continuing to focus on the conduct of those searching the Treasury website rather than the Treasury failure to keep Budget material confidential.
  • In relation to Mr Makhlouf’s other written and oral media statements, Mr Ombler found Mr Makhlouf acted in good faith, reasonably and in a politically neutral manner.

Mr Hughes says he accepts Mr Ombler’s investigation and all his findings, which were reviewed by former Solicitor-General Michael Heron QC.